List of Territorial Tax Countries with formal and de-facto treatment of foreign income

[Jock]

To be allowed to work in the Philippines am AEP is required, how would someone obtain a work permit for doing online work for a corporation abroad? Only one residence status can get exemption of requiring a work permit but even with that there is no visa or provision that tackle this situation.

Holders of a Permanent Residence Visa are exempt from obtaining an AEP pursuant to DOLE Department Order No. 97-09: "Revised Rules for the Issuance of Employment Permits to Foreign National". You can get a Certification from DOLE stating such. I did.

 

[backpacker]

Holders of a Permanent Residence Visa are exempt from obtaining an AEP pursuant to DOLE Department Order No. 97-09: "Revised Rules for the Issuance of Employment Permits to Foreign National". You can get a Certification from DOLE stating such. I did.

Post #73 of this thread:

It is, of course, more than one, even though that's pretty irrelevant in the context of this thread -> WORK PERMIT APPLICATION FOR FOREIGN NATIONALS | DOLE-CAR

 

[Juleski70]

So a clear mission statement about no longer being Wild West, but at the same time a recognition of the reality, that the Philippines really was Wild West - and might still be.

This.
I think this points to the middle-ground reality: the Philippines was a wild west; it is ever-trying to modernize and become less of a wild west and less corrupt… but (in my experience) tends to only succeed in (very) small increments. Future wild-westness is not guaranteed, but reform/modernization is not progressing at breakneck speed, either.

Our problem with our foreign minds is that we are mentally predisposed to go into detail to an extent that Filipinos simply don`t. Their law is unclear. One`s predicament therefore all comes down to the interpretation of the enforcing Pinoy and so there is risk. How great a risk?

This too. There is some challenging legal minutiae you should pay attention to, but remember not to lose sight that the overall tenor of Philippine law/policy makes it clear that they are not looking to tax foreign-sourced income (unless you're a Filipino citizen based in the Philippines). Moreover, everywhere in the world, there is a gap between what is written law and what is actually enforced; in my experience that gap is VERY wide in the Philippines.
I'll also say that when I read the law on foreigners and foreign-sourced income, it is clear to me it is written with a clear intention to guide (large, multinational) foreign corps employing foreign expats: register your foreign branch office, pay the employee properly, withhold their income tax, etc. The authors of the code are not thinking about solopreneurs/individuals managing their offshore holdcos on their laptop from their home office.

Again, I'm grateful for @backpacker 's excellent insights/research. But the tone of his conclusion statements could easily lead readers to think that investigations and enforcement for individual foreigners is very high/unavoidable, and that doesn't match my experience nor that of my colleagues; nor do I see an epidemic of foreigner-with-foreign-corps tax cases in the news or in expat groups online.

 

[JackAlabama]

This.
I think this points to the middle-ground reality: the Philippines was a wild west; it is ever-trying to modernize and become less of a wild west and less corrupt… but (in my experience) tends to only succeed in (very) small increments. Future wild-westness is not guaranteed, but reform/modernization is not progressing at breakneck speed, either.

This too. There is some challenging legal minutiae you should pay attention to, but remember not to lose sight that the overall tenor of Philippine law/policy makes it clear that they are not looking to tax foreign-sourced income (unless you're a Filipino citizen based in the Philippines). Moreover, everywhere in the world, there is a gap between what is written law and what is actually enforced; in my experience that gap is VERY wide in the Philippines.
I'll also say that when I read the law on foreigners and foreign-sourced income, it is clear to me it is written with a clear intention to guide (large, multinational) foreign corps employing foreign expats: register your foreign branch office, pay the employee properly, withhold their income tax, etc. The authors of the code are not thinking about solopreneurs/individuals managing their offshore holdcos on their laptop from their home office.

Again, I'm grateful for @backpacker 's excellent insights/research. But the tone of his conclusion statements could easily lead readers to think that investigations and enforcement for individual foreigners is very high/unavoidable, and that doesn't match my experience nor that of my colleagues; nor do I see an epidemic of foreigner-with-foreign-corps tax cases in the news or in expat groups online.

Yes indeed. The fact is not much is happening at all. Otherwise sources left right and center could be provided easily.
I however do not doubt the extensive research provided here, which might even could be accurate.

 

[Mike Forman]

This.
I think this points to the middle-ground reality: the Philippines was a wild west; it is ever-trying to modernize and become less of a wild west and less corrupt… but (in my experience) tends to only succeed in (very) small increments. Future wild-westness is not guaranteed, but reform/modernization is not progressing at breakneck speed, either.

This too. There is some challenging legal minutiae you should pay attention to, but remember not to lose sight that the overall tenor of Philippine law/policy makes it clear that they are not looking to tax foreign-sourced income (unless you're a Filipino citizen based in the Philippines). Moreover, everywhere in the world, there is a gap between what is written law and what is actually enforced; in my experience that gap is VERY wide in the Philippines.
I'll also say that when I read the law on foreigners and foreign-sourced income, it is clear to me it is written with a clear intention to guide (large, multinational) foreign corps employing foreign expats: register your foreign branch office, pay the employee properly, withhold their income tax, etc. The authors of the code are not thinking about solopreneurs/individuals managing their offshore holdcos on their laptop from their home office.

Again, I'm grateful for @backpacker 's excellent insights/research. But the tone of his conclusion statements could easily lead readers to think that investigations and enforcement for individual foreigners is very high/unavoidable, and that doesn't match my experience nor that of my colleagues; nor do I see an epidemic of foreigner-with-foreign-corps tax cases in the news or in expat groups online.

I agree on that and started the topic in Philippines. Since Im personally interested to get more clarity from a legal perspective e will consult a law firm specialized in PE and taxation . This might take a while but if we have some information we will share this in forum.

We have local friends who run the most popular restaurant/bar in a town and all are on tourist visa's. They are just shareholders and be present there almost daily to "observe" the operations. They get regularly in contact with local authorities, police for issues as sound level complaints from neighbours who had filed a group complaint through a legal firm and got police and local authorities involved, none was ever questioned about their employment status. Some of them own several businesses. I wouldnt recommend this as in Philippines it all depends on who you are dealing with and if you run a business locally you better get a AEP (if you got no exemption) and get your tax filings in order.

Our personal experience with several governmental departments is that sometimes they are very stubborn and demand unreasonable things but things always get resolved in one way or another using connections and other means.

Holders of a Permanent Residence Visa are exempt from obtaining an AEP pursuant to DOLE Department Order No. 97-09: "Revised Rules for the Issuance of Employment Permits to Foreign National". You can get a Certification from DOLE stating such. I did.

correct, thats why I mentioned only certain visas can obtain this, and its quite easy to obtain this exemption card if you have that visa. Only indeed permanent resident (not sure all) and not SIRV, SRRV etc

 

[2fire]

If you want to stay near EU zone then Gibraltar could probably work since foreign income beside interest income and royalty income is not taxed in Gibraltar.

There are other options like Georgia, Panama, and so on depending on your personal prefererences.

Dear Marzio,

Thank you for creating spreadsheets about territorial tax.
Does it also works for collecting royalties, licenses fees or there is also some other countries which has special zero tax policy for collecting royalties?

 

[daniels27]

Dear Marzio,

Thank you for creating spreadsheets about territorial tax.
Does it also works for collecting royalties, licenses fees or there is also some other countries which has special zero tax policy for collecting royalties?

You probably should check the tax treaty as in most cases withholding tax is more than you may ever save.

 

[Marzio]

Does it also works for collecting royalties

It could, it depends where your royalties are coming from.